Benefit and credit administration

Context

The CRA administers taxes, benefits and credits. Benefits are amounts paid to those who are entitled to them. They are targeted to low and modest income individuals through income-testing. The CRA administers several federal benefits, such as the Canada child benefit, the GST/HST credit, and Children's special allowances. In addition to its regular work delivering benefits, during the COVID-19 pandemic, the CRA was called on to administer nine new programs and two one-time supplemental benefit payments, detailed above. It also administers many refundable tax credits, such as the Canada workers benefit, as well as related provincial/territorial programs. Refundable tax credits first reduce the amount of federal tax an individual must pay, where the total of these credits is more than the federal tax owed, it may result in refund, including to an individual even if they owe no taxes. The CRA also administers non-refundable credits such as the Disability tax credit, which reduce or eliminate the amount of federal tax an individual must pay, however, if the total of the credits is more than the federal tax owed, there will not be a refund for the difference.

In addition to federal benefits and credits, the CRA administers provincial and territorial benefits and credits. The CRA also plays a key role in supporting provinces, territories and other government departments in administering programs under their control through information exchange programs, primarily for income verification, including Employment Insurance, the Canada Pension Plans, and Guaranteed Income Supplement.

The CRA works to ensure that Canadians obtain the support and information they need to know what benefits and credits they may be eligible to receive, receive their benefit payments in a timely manner, and have avenues of redress when they disagree with a decision on their benefit eligibility.

As part of the Government's COVID-19 Economic Response Plan, the CRA was called on to support Canadians through the delivery of a number of critical emergency benefit programs, which are taxable benefit payments. These benefits helped Canadian individuals and businesses cope with the economic impacts of the pandemic. The CRA demonstrated its capacity and agility by rapidly launching significant, new benefits in a matter of weeks and subsequently adapting these new benefits while introducing new ones.

Considerations

Many benefit and credit recipients are vulnerable individuals (e.g., persons with disabilities, seniors, newcomers, and low- or modest-income individuals). Accordingly, any payment and eligibility issue, real or perceived, has the potential to attract significant attention and public commentary from social advocacy groups, the media, parliamentarians, and Canadians in general. The CRA's primary goal is to ensure people receive the benefits and credits to which they are entitled. As part of its mandate, the CRA also has put in place safeguards and up-front verification and security measures to ensure only those who are entitled to benefits and credits receive them. Consequently, benefits administration is an area that tends to draw both political and media interest, and the CRA seeks to demonstrate it is responsive, improving, and effective.

Outreach activities

The benefits outreach program promotes and raises awareness of the benefits and credits that may be available to vulnerable segments of the population and encourages community organizations to participate in the CVITP. Given public health restrictions throughout Canada, the CRA pivoted to virtual outreach sessions through, for example, telephone and video-conferences. The sessions allow the CRA to answer questions and distribute information products—tailored to specific population segments—to raise awareness of the eligibility of benefits and credits for individuals and the importance of filing taxes to access these benefits and credits.

The CRA works closely with key partners, such as Employment and Social Development Canada (ESDC) and Indigenous Services Canada, to deliver ongoing outreach activities in a collaborative manner. Since the start of the pandemic, the Agency has also collaborated with federal departments (e.g., Agriculture and Agri-Food Canada; Immigration, Refugees and Citizenship Canada; and Innovation, Science and Economic Development), provincial and territorial and non-governmental organizations to coordinate outreach on support measures, leverage relationships, minimize overloading channels and understand best practices to maximize reach and engage new audiences, especially vulnerable populations.

The CRA has also committed to increase client support by proactively contacting clients who are eligible for but not receiving benefits, and work to further automate tax filing for simple returns to help clients receive the benefits to which they are entitled. The non-filer program identifies people likely to be eligible for benefits and sends letters to educate and “nudge” individuals to file their returns.

The CRA connects with Indigenous peoples through outreach and the CVITP and also tailors services and information to them, such as creating a web page that specifically provides tax and benefit information for Indigenous peoples. The CRA has also worked with Aboriginal Financial Officers Association Canada, an organization that helps Indigenous people better manage and govern their communities and organizations, to create a podcast on tax and benefits.

Benefits system renewal

The benefits system renewal project was initiated to address aging infrastructure issues with the benefits system and improve the CRA's capacity in the areas of program growth and service delivery. The renewed system, which was implemented in February 2021 and is currently delivering benefits, has strengthened the CRA's benefits delivery by modernizing processes and incorporating more efficient technologies to ensure the uninterrupted delivery of benefit payments and services. It has also provided a foundation from which the CRA will be able to continue to respond to opportunities for growth in program and service delivery on behalf of its federal and provincial government partners. To enable timely completion of this renewal project, provinces and territories limited major changes and new benefits and/or credits during the final stages of construction. With the project completed, it is expected that requests for new programs will resume in early 2022.

COVID-19 programs

As part of the Government of Canada's COVID-19 Economic Response Plan to support Canadians and businesses facing hardship as a result of the COVID-19 pandemic, the CRA worked with ESDC and the Department of Finance to design and efficiently deliver nine programs. These benefits have helped reduce the financial burden on Canadians generated by the pandemic.

These emergency measures were designed to expedite disbursements to Canadians and businesses, and relied largely on attestations, knowing that additional work would be required for back-end verification activities to uphold the integrity of the programs. The CRA is currently working on managing the complexities of the repayment of benefits where recipients were not entitled to receive them. We are planning to commence post payment validation activities for individuals this fall, provided an accommodating economic and public health landscape. The CRA will take an empathetic, people-first approach to support all individuals and businesses facing issues with their repayment. Payment arrangement parameters have been expanded to provide more flexibility based on their ability to pay.

To assist Canadians who receive these benefits in completing their tax returns, the CRA has expanded its Auto-fill my return service to include amounts received for COVID-19 emergency relief measures. The Auto-fill my return service is a secure service that allows individuals and authorized representatives using certified software, to automatically fill in parts of an income tax and benefit return with information that the CRA has available at the time of the request.

Next steps

The CRA will continue to:

• Proactively reach out to clients who are eligible for but not receiving benefits and credits
• Work with vulnerable segments of the population, including Indigenous peoples, to better understand their needs through ethnographic research and client experience testing, and help them receive the benefits and credits to which they are entitled
• Work with provinces and territories to leverage the renewed benefits system
• Review and validate the applications of benefit recipients whose eligibility is in question using a risk-based approach
• Work with stakeholder and community organizations to continue to develop and implement free, automatic tax-filing services for simple returns to ensure Canadians receive the benefits they need